Here's Why You Should Pass on Baxter's Stock Despite Healthy First Quarter Earnings

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Investors looking at Baxter International (BAX - Get Report) should give this big pharma player a pass.

Given the company's strong earnings report on Tuesday, this is definitely a contrarian view, but the surest profits over the long haul are made by betting against the crowd.

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For starters, Baxter faces new challenges following the spin-off of bio-pharmaceutical firm Baxalta.

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In addition, Baxter cut its dividend last year to $1.27 cents from $2.05 cents in 2014.

Trading at nearly 25 times forward earnings and a price-to-earnings ratio of 2.5, compared with the drug...